calculating payment for sick and bereavement leave -“relevant daily pay”

Our Holidays Online Tool (http://www.ers.govt.nz/holidays-online-tool/default.aspx) makes it easy to work out what sickness and bereavement leave an employee is entitled to. It also calculates public holiday entitlements. Make sure you have payroll information or a payslip handy when you use the tool.

Relevant daily pay is used to calculate payment for sick and bereavement leave. Relevant daily pay reflects what the employee would have been paid if they had worked on the day in question.

1. In many cases it will be clear what payment the employee would otherwise have earned on the day – if this is the case, then that amount should be used as relevant daily pay. Any such calculation must include:

• productivity or incentives payments, including commission and piece rates, if those payments would have been received had the employee worked
• overtime payments
• the cash value of board & lodgings provided.

2. In cases where this amount is not clear the payment is calculated by dividing the employee's gross earnings for either:

• the four weeks before the end of the pay period immediately before the holiday or leave, or
• where the pay period is longer than 4 weeks, the pay period before the calculation
• by the number of whole or part days the employee either worked or was on paid leave or holiday during that period.

3. Employment agreements may specify a rate of relevant daily pay, but only if that rate is greater than or equal to the rate determined according to (1) or (2) above.